David Skeel: Facing Up to America's Pension Woes

Public retirees everywhere insist that Chapter 9 does not permit any benefit changes. Their legal case is weak.

By

David Skeel

July 24, 2013 7:08 p.m. ET

Right after Detroit filed for bankruptcy under federal law last week, Michigan's Ingham County Circuit Judge Rosemarie Aquilina issued a set of rulings that attempted to stop the process cold—she worried that a bankruptcy would restructure Detroit city workers' pensions in violation of the state constitution. Few expect her rulings to stand—a state Court of Appeals panel and the federal bankruptcy judge have already imposed stays on her orders.But Judge Aquilina correctly identified the key issue in the case, which is also the...